"ABC" Company has $120,000 of assets, and it uses only equity to finance its assets....
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"ABC" Company has $120,000 of assets, and it uses only equity to finance its assets. Its sales for the last year were $193,000, and its net income after taxes was $26,000. Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity to 19%. What profit margin would "ABC" Company need in order to achieve the 19% ROE, holding everything else constant?
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